Explanation

If you own a business, financial statements are necessary for:

• Evaluating the financial performance of the business: Financial statements help you understand your company's financial position, profitability, and cash flows, enabling you to make informed decisions about its operations and strategy.
• Making investment decisions: Financial statements provide the information you need to evaluate potential investments, such as new projects or acquisitions, and to determine whether they align with your business goals and objectives.
• Applying for loans: Lenders require financial statements to assess your company's creditworthiness and ability to repay loans. Financial statements help demonstrate your company's financial stability and capacity to service debt.